Cisco Q4 revenue $14.67B beats estimates, AI demand fuels growth

South Africa

The Top 40 index added 1.11% yesterday to close at 94,846.9 points, while the All Share index gained 0.99% to reach 102,278.4 points. South African business confidence rebounded in July, with the SACCI index rising to 116.7 from 113.2 in June, driven by stronger vehicle sales, manufacturing output, and precious metals prices, alongside moderate inflation. Retail sales grew 1.6% y/y in June. However, the automotive sector remains under pressure: low domestic sales and rising imports have led to 12 closures and over 4,000 job losses over two years. Output remains far below the Automotive Masterplan 2035 targets. Additionally, political tensions with the US have escalated following criticism of South Africa’s human rights record, potentially complicating international investment sentiment.

European Union

European equities climbed, with the STOXX 600 up 0.5%, supported by healthcare and technology stocks amid expectations of US Fed rate cuts. Genmab and Bayer posted strong gains. Spain’s inflation ticked up to 2.7% in July, matching forecasts. In the UK, housing market momentum slowed sharply due to tax policy uncertainty, with negative shifts in demand and pricing. Meanwhile, Russia’s GDP grew just 1.1% in Q2 2025, down from 4% a year earlier, as signs of economic deceleration emerge despite robust defence spending. Investors are weighing inflation risks and monetary policy divergence across the continent.

United States

US equity indices reached new closing highs, fuelled by expectations that the Fed is nearing the start of a rate-cutting cycle. The S&P 500’s elevated valuations are prompting a shift in investor focus beyond technology, with healthcare leading sectoral gains. Investors were reassured as import tariffs have not yet significantly lifted consumer inflation. Fed officials, including Chicago’s Austan Goolsbee, are scrutinising the inflationary impact of tariffs to inform future policy moves. Markets are pricing in a high probability of a September rate cut, with discussions of a potential 50-basis-point move gaining modest traction.

Asia

Australia’s unemployment rate eased to 4.2% in July, aligning with forecasts, while employment rose by 24,500, just below expectations. In China, Tencent shares rose after reporting 15% y/y Q2 revenue growth, driven by gaming and AI. Lenovo’s CEO welcomed the US-China tariff pause and affirmed robust AI infrastructure demand. Meanwhile, U.S. Treasury Secretary Bessent suggested the Bank of Japan is behind the curve on inflation, in contrast with BOJ’s cautious stance. The region remains sensitive to policy signals from both the Fed and domestic central banks, while strong tech earnings underscore resilience despite geopolitical tensions.

Currencies

The rand advanced on upbeat domestic data and a weaker US dollar, while sterling hit a three-week high amid expectations that US rates will fall more rapidly than UK rates. The dollar fell to multi-week lows as traders priced in a near-certain September Fed cut, with a 7% chance of a 50bps move. Crypto markets rallied, with bitcoin hitting new highs, fuelled by both dovish Fed sentiment and growing institutional participation. Currency markets are being shaped by diverging rate outlooks and geopolitical uncertainty, creating short-term tactical opportunities but increasing volatility across FX pairs.

Commodities

Gold extended gains for a third session, supported by dovish Fed expectations following subdued US inflation data. Oil prices stabilised after prior losses, bolstered by geopolitical uncertainty ahead of a Trump-Putin meeting and high market expectations of a September Fed rate cut. However, a surprise 3 million barrel rise in US crude inventories capped further upside. Treasury Secretary Bessent floated the possibility of a 50bps rate cut in response to soft labour data. The evolving rate outlook, combined with geopolitical risks, continues to drive volatility across commodity markets, particularly in energy and precious metals.

Nedbank Group (NED) +2.33%

Nedbank has entered into a binding agreement to acquire 100% of fintech firm iKhokha for approximately R1.65 billion, pending regulatory approval. This strategic move strengthens Nedbank’s SME proposition by integrating iKhokha’s digital payments and lending capabilities. iKhokha, a prominent player in South Africa’s fintech sector, processes over R20 billion annually and has extended R3 billion in SME funding. Post-acquisition, iKhokha will remain operationally independent under existing leadership, with a management lock-in in place. CEO Jason Quinn highlighted the synergy between iKhokha’s mission and Nedbank’s digital transformation vision, targeting SME growth and potential regional expansion in inclusive financial services.

Capitec Bank Holdings Limited (CPI) +1.98%

Capitec issued a trading statement forecasting a 22–27% rise in both headline and basic earnings per share for H1 FY2026, to between 6,764–7,041 cents and 6,792–7,070 cents respectively. The performance reflects broad-based strength across its business lines, supported by higher loan disbursements, stable credit loss ratios, and robust net interest income. Transaction and commission income also expanded, driven by increased client activity, simplified fee structures, and continued growth in Capitec Connect and value-added services. Funeral insurance income benefited from the end of a profit-sharing agreement and strong policy sales. Income from Avafin will contribute a full six months.

Truworths International Limited (TRU) +1.33%

Truworths reported a 2.7% increase in group retail sales to R22.0 billion for the 52 weeks to 29 June 2025, supported by a 9.7% rise at Office UK. However, Truworths Africa's sales declined 0.4%, impacted by weak macroeconomic conditions, subdued consumer spending, and markdowns following late deliveries and a delayed winter season. Online sales in SA rose 33.7%, now comprising 6.5% of sales. Group EPS is expected to fall 28–32%, while HEPS is seen down 7–11%, reflecting base effects from once-off items in FY24. A new distribution centre and store refurbishments were key operational highlights during the period.

Grindrod Limited (GND) +3.41%

Grindrod expects EPS for H1 2025 to rise over 100% to 216–223.5 cents, boosted by R903 million in one-off gains from currency translation reserve releases linked to joint venture transactions. Earnings are expected between R1.44–R1.49 billion, up from R486 million in H1 2024. HEPS is forecast at 85–92.5 cents, up 18–28%. Core headline earnings from ports, terminals, and logistics are expected to be in line with the prior year. The results reflect strategic restructuring and improved capital efficiency, with full interim results due on 22 August 2025. The trading update is unaudited.

Cisco Systems Inc.(CSCO) -1.37%

Cisco beat Q4 revenue expectations, reporting $14.67 billion, and guided Q1 revenue to $14.65–$14.85 billion, above consensus. The AI boom continues to drive demand for networking hardware, with AI infrastructure orders surpassing $800 million in Q4 and totalling over $2 billion for fiscal 2025—more than double its original forecast. CEO Chuck Robbins highlighted strong cloud customer demand and robust hyperscale investment. Cisco has also expanded its global AI footprint, partnering with Saudi-backed Humain and supporting Bahrain’s digital infrastructure. With a healthy order pipeline and growing exposure to sovereign AI deployments, Cisco is well positioned for sustained top-line growth.

Telstra Group Limited (TLS) 0.00%

Telstra forecast FY26 underlying EBITDA of A$8.15–A$8.45 billion, slightly underwhelming the market despite announcing a A$1 billion share buyback. FY25 results met expectations, with a 14% increase in underlying EBITDA to A$8.61 billion and statutory profit up 31% to A$2.34 billion. Solid contributions from mobile, fixed consumer, SMB, and enterprise units supported performance, alongside effective cost management. The company also declared a final dividend of 9.5 cents per share. While earnings momentum is positive, market disappointment on forward guidance triggered a 2% share price decline, tempering investor sentiment amid ongoing capital returns and operational improvements.

Westpac Banking Corporation (WBC) -2.11%

Westpac reported a 5% y/y rise in Q3 net profit to A$1.9 billion, driven by expanded net interest margins (1.99%) and solid gains in lending and deposits. Net interest income rose 4% sequentially to A$5 billion, while deposits and loans increased by A$10 billion and A$16 billion respectively. The result propelled Westpac shares over 5% higher to a decade high of A$35.66. Year-to-date, the stock is up nearly 5%, and nearly 20% over 12 months. Improved margin discipline and credit growth underpin strong investor confidence as Westpac continues to benefit from a supportive rate environment.

Suncorp Group Limited (SUN) -0.30%

Suncorp delivered FY25 cash earnings of A$1.49 billion, ahead of consensus, and announced a new A$400 million share buyback. Statutory profit surged 52% to A$1.82 billion, aided by gains from the banking unit divestment. Margin expansion, driven by repricing strategies and benign natural hazard costs (A$1.36 billion, well below allowance), boosted profitability. Gross written premiums rose 6% to A$15.01 billion, with mid-single digit growth expected in FY26. Investment returns grew 16% to A$766 million, and the underlying insurance trading ratio rose to 11.9%. With strong capital management, Suncorp remains well positioned as a focused general insurer amid favourable underwriting conditions.

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